POS: A Massive Tech Problem Looking for a Solution

POS: A Massive Tech Problem Looking for a Solution

By Joe Skorupa - 10/01/2018

Retailers have long known POS systems have become a tech problem looking for a solution – massive, expensive and difficult to upgrade. As the store’s essential workhorse application, POS has added so many functions and capabilities over the years that it became an unwieldy, monolithic, complex structure that defied simplification and streamlined management.

As a result, it is not surprising to learn that retail IT departments have begun searching for an entirely new approach to POS that offers a pathway to solve these massive and costly problems. This is the subject of the recent RIS Targeted Research report, “Evolution of the Next-Gen POS.”

One of the major findings in the study is that there is an unprecedented level of POS investment and upgrade and implementation activity taking place today and scheduled for the next two years.

A second major finding is that microservices architecture – included in a hybrid model that also includes platform-as-a-solution, serverless, cloud and more traditional platform approaches – will enter retail enterprises sooner than many expected.

Key Findings in the Study

A few of the major findings in the study include:

26% of retailers say they have upgraded their POS systems within the last 2-4 years and 18% are in the process of upgrading now. Nearly a third (32%), plan to begin a POS upgrade within 12 months and another 11% plan to upgrade within two years. In total, these figures indicate an exceptionally high level of POS upgrade activity (69%) either taking place today or planning to begin within two years.

Surprisingly, 29% of retailers believe microservices architecture is of high importance to them in terms of being able to transform their current POS into next-generation technology. Of these, 18% are currently in the process of pursuing microservices and doing in-house or alpha tests. Another 11% are doing early-stage demos or observing external tests.

However, microservices architecture is not the only option retailers are looking at and it is clear the POS of the future will consist of a hybrid approach that includes microservices (chosen by 81%), platform as a service (81%), and a cloud or serverless model (80%). Another strong model for inclusion in this hybrid architecture is a full-featured platform that is built with a broad range of interoperable functions, which was chosen by 50%.

Also on the radar for next-gen POS development is cashierless checkout. For most retailers, cashierless checkout is a bright, shiny object with no real business appeal. A majority (53%) say they do not plan any kind of response to the Amazon Go approach because it does not fit their business model or customer segment. However, 26% say they are interested in keeping abreast of this promising technology but will wait until costs and technical issues are resolved before moving forward.

While delivering services to shoppers will be a major driver for the next-generation POS, at its heart the key mission will be to deliver important business benefits. These include making stores more tech-enabled, giving employees advanced tools they need to become more productive, and enabling the IT department to keep up with the accelerating pace of omnichannel demands in a streamlined and cost-effective way.

To download the complete set of charts and analysis for this report, click here.

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